Which of the Following Is an Example of Managing Earnings

question 99

Multiple Choice

Which of the following is an example of managing earnings down?

• A) Changing estimated bad debts from 3 percent to 2.5 percent of sales.
• B) Revising the estimated life of equipment from 10 years to 8 years.
• C) Not writing off obsolete inventory.
• D) Reducing research and development expenditures.

---

Definitions:

Long Bonds

Bonds with a long duration to maturity, typically over 10 years, often associated with higher risk but higher yield.

Capital Gains Yield

The price appreciation component of the total return on an investment, calculated as the increase in the investment's price divided by its initial price.

Dividends

Profit distributions paid out to shareholders by a company.

Shares

Ownership units in a corporation, representing a portion of the company's capital.